UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.  )

Filed by the Registrant ☒             Filed by a Party other than the Registrant ☐

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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☒

Definitive Proxy Statement

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Definitive Additional Materials

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☐

Soliciting Material under § 240.14a-12

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WORKDAY, INC.

(Name of Registrant as Specified in Its Charter)

    
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒

No fee required.

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☐

Fee paid previously with preliminary materials.

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.

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WORKDAY, INC.
6110 STONERIDGE MALL ROAD
PLEASANTON, CALIFORNIA 94588

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

The 2022 Annual Meeting of Stockholders (“Annual Meeting”) of Workday, Inc., a Delaware corporation (referred to as “Workday,” “we,” “us,” and “our”) will be held via live audio webcast on Wednesday, June 22, 2022, at 9:00 a.m. PDT to consider the Items of Business listed below and more fully described in the accompanying Proxy Statement. The Annual Meeting is being held in a virtual format to help reduce costs, expand access, enable improved communication, and address public health concerns arising from the COVID-19 pandemic.

Items of Business

1.

To elect four nominees to our Board of Directors to serve as Class I directors until the 2025 Annual Meeting of Stockholders;

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2.

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2023;

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3.

To approve, on an advisory basis, the compensation paid to Workday’s named executive officers;

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4.

To approve the 2022 Equity Incentive Plan to replace our 2012 Equity Incentive Plan; and

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5.

To approve the Amended and Restated 2012 Employee Stock Purchase Plan.

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All stockholders of record at the close of business on April 25, 2022 — which the Board of Directors has established as the record date — are entitled to vote on the above items and to attend the Annual Meeting. Beginning on or about May 10, 2022, a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) is being mailed to stockholders of record. It contains instructions on how to access the Proxy Statement for our Annual Meeting and our Annual Report to Stockholders on Form 10-K for our fiscal year ended January 31, 2022 (together, the “proxy materials”) online at www.proxyvote.com. The Internet Notice also includes instructions on how to vote online, as well as how to receive a paper or email copy of the proxy materials, which will include instructions on voting by telephone or mail, as applicable.

You will be able to listen to the Annual Meeting, submit your questions, and vote during the live audio webcast of the meeting by visiting www.virtualshareholdermeeting.com/WDAY2022 and entering the 16-digit control number provided to you. Further details about voting and attending the Annual Meeting are set forth in the Question and Answer section beginning on page 80 of the Proxy Statement.

If you have any questions regarding this information or the proxy materials, please visit our website at www.workday.com or contact our Investor Relations department at (925) 379-6000 or via email at IR@workday.com.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 22, 2022: THIS PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT www.proxyvote.com

We appreciate your continued support of Workday and look forward to receiving your proxy.

By order of the Board of Directors,

Aneel Bhusri
Co-Founder, Co-Chief Executive Officer, and
Chairman of the Board of Directors
May 10, 2022

TABLE OF CONTENTS

​	PROXY STATEMENT SUMMARY	​	​	1	​
​	PROPOSAL NO. 1: ELECTION OF DIRECTORS	​	​	6	​
​	PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	​	​	15	​
​	PROPOSAL NO. 3: ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION	​	​	17	​
​	PROPOSAL NO. 4: APPROVAL OF THE 2022 EQUITY INCENTIVE PLAN	​	​	18	​
​	PROPOSAL NO. 5: APPROVAL OF THE AMENDED AND RESTATED 2012 EMPLOYEE STOCK PURCHASE PLAN	​	​	26	​
​	DIRECTORS AND CORPORATE GOVERNANCE	​	​	30	​
​	Corporate Governance	​	​	30	​
​	Code of Conduct	​	​	30	​
​	Risk Oversight by Our Board of Directors	​	​	30	​
​	Security, Privacy, and Trust	​	​	31	​
​	Stockholder Engagement	​	​	31	​
​	Communications with the Board of Directors	​	​	31	​
​	Director Independence	​	​	31	​
​	Leadership Structure	​	​	31	​
​	Lead Independent Director	​	​	32	​
​	Executive Sessions of Independent Directors	​	​	32	​
​	Meetings of the Board of Directors	​	​	32	​
​	Committees of the Board of Directors	​	​	33	​
​	Compensation Committee Interlocks and Insider Participation	​	​	35	​
​	Considerations in Evaluating Director Nominees	​	​	35	​
​	Stockholder Recommendations for Nominations to the Board of Directors	​	​	36	​
​	Non-Employee Director Compensation	​	​	37	​
​	ESG at Workday	​	​	39	​
​	ESG and our People	​	​	39	​
​	ESG and the World Around Us	​	​	40	​
​	ESG and our Customers	​	​	41	​
​	RELATED PARTY TRANSACTIONS	​	​	43	​
​	REPORT OF THE AUDIT COMMITTEE	​	​	46	​
​	EXECUTIVE OFFICERS AND OTHER EXECUTIVE MANAGEMENT	​	​	47	​
​	EXECUTIVE COMPENSATION	​	​	52	​
​	Compensation Discussion and Analysis	​	​	52	​

​	Leadership Structure and Changes	​	​	52	​
​	Executive Summary	​	​	53	​
​	Executive Compensation Philosophy, Objectives, and Design	​	​	54	​
​	Our Compensation-Setting Process	​	​	56	​
​	Compensation Peer Group	​	​	58	​
​	Elements of Our Executive Compensation Program	​	​	59	​
​	Other Compensation Policies	​	​	63	​
​	Tax and Accounting Considerations	​	​	65	​
​	Report of the Compensation Committee	​	​	66	​
​	SUMMARY COMPENSATION TABLE	​	​	67	​
​	Grants of Plan-Based Awards in Fiscal 2022	​	​	68	​
​	Outstanding Equity Awards at Fiscal Year-End.	​	​	69	​
​	Option Exercises and Stock Vested in Fiscal 2022	​	​	70	​
​	401(k) Plan	​	​	70	​
​	Pension Benefits	​	​	70	​
​	Nonqualified Deferred Compensation	​	​	70	​
​	CEO Pay Ratio Disclosure	​	​	70	​
​	EQUITY COMPENSATION PLAN INFORMATION	​	​	72	​
​	Securities Authorized for Issuance Under Equity Compensation Plans	​	​	72	​
​	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	​	​	73	​
​	SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	​	​	75	​
​	EMPLOYMENT ARRANGEMENTS AND INDEMNIFICATION AGREEMENTS	​	​	76	​
​	Potential Payments upon Termination or Change in Control	​	​	77	​
​	Indemnification Arrangements	​	​	78	​
​	QUESTIONS AND ANSWERS	​	​	80	​
​	ADDITIONAL INFORMATION	​	​	84	​
​	Stockholder Proposals for 2023 Annual Meeting	​	​	84	​
​	Solicitation of Proxies	​	​	84	​
​	Fiscal 2022 Annual Report	​	​	84	​
​	OTHER MATTERS	​	​	84	​
​	Appendix A: 2022 Equity Incentive Plan	​	​	A-1	​
​	Appendix B: Amended and Restated 2012 Employee Stock Purchase Plan	​	​	B-1	​

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Proxy Statement contains forward-looking statements, which are subject to safe harbor protection under the Private Securities Litigation Reform Act of 1995. All statements contained in this report other than statements of historical fact, including statements regarding our strategies and objectives, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “seek,” “plan,” and similar expressions are intended to identify forward-looking statements. Risk factors that could cause actual results to differ are set forth in the “Risk Factors” section of, and elsewhere in, our Annual Report on Form 10-K for the fiscal year ended January 31, 2022 and our other filings with the Securities and Exchange Commission (“SEC”). All forward-looking statements are based on management’s estimates, projections, and assumptions as of the date hereof. Although we believe that the forward-looking statements are reasonable, we cannot guarantee future results, levels of activities, performance, or achievements. We undertake no duty to update any of these forward-looking statements after the date of this Proxy Statement or to conform these statements to actual results or revised expectations.

TRADEMARKS

Workday, the Workday logo, For a Changing World, Opportunity Onramps, Peakon, VIBE, VNDLY, and Zimit are trademarks of Workday, Inc., which may be registered in the United States and elsewhere. Other trademarks, service marks, or trade names appearing in this Proxy Statement are the property of their respective owners.

NO INCORPORATION OF WEBSITES BY REFERENCE

This Proxy Statement includes several website addresses. These are intended to provide inactive, textual references only, and the information on these websites is not a part of this Proxy Statement.

FISCAL YEAR

Our fiscal year ends on January 31. References to “fiscal 2022,” for example, refer to the fiscal year ended January 31, 2022.

   

 

​	Date and Time:	​	​	June 22, 2022, 9:00 a.m. Pacific Daylight Time	​
​	Location:	​	​	The Annual Meeting will be held online at www.virtualshareholdermeeting.com/ WDAY2022 via a live audio webcast. You will not be able to attend the Annual Meeting in person.	​
​	Record Date:	​	​	April 25, 2022	​
​	Meeting Access:	​	​	Stockholders who held shares of our common stock as of the record date will be able to access and vote at the Annual Meeting by using the 16-digit control number included in the Internet Notice or with the proxy materials they received. Others may also access and listen to the virtual meeting via the link above but are not eligible to vote.	​
​	Who Can Vote:	​	​	Holders of record of our Class A and Class B common stock as of the record date are entitled to vote. Our Class A common stock, which is publicly traded, has one vote per share. Our Class B common stock, which is primarily held by our executive officers, directors, and other affiliates, has 10 votes per share. We strongly encourage all stockholders to vote and to do so as promptly as possible.	​
​	How to Vote:	​	​	Below are the ways stockholders who held shares of our common stock as of the record date can vote ahead of and during the Annual Meeting. If you only received an Internet Notice, you can vote online. If you received a copy of the proxy materials, you can vote online, by phone, or by mail following the instructions provided. If you hold your shares through a broker, bank, or other nominee, you should receive a voting instruction form that contains voting instructions.	​
​		​	​	​	​

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HOW TO VOTE (requires the 16-digit control number included in your Internet Notice, proxy card, or voting instruction form)​

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ONLINE BEFORE ANNUAL MEETING

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PHONE (if you received proxy materials)

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MAIL (if you received proxy materials)

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ONLINE DURING ANNUAL MEETING

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Go to www.proxyvote.com until 11:59 p.m. EDT on June 21, 2022

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Call toll-free at 1-800-690-6903 until 11:59 p.m. EDT on June 21, 2022

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Complete and mail your proxy card so it is received prior to the Annual Meeting

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Go to www.virtualshareholdermeeting.com/ WDAY2022

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Please see the “Question and Answer” section beginning on page 80 for additional information about the Annual Meeting, voting, and other procedures.

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2022 Proxy Statement | 1

PROXY STATEMENT SUMMARY

 

​	PROPOSALS	​	​	BOARD RECOMMENDATION				​	​	FURTHER DETAILS	​
​	1. To elect to our Board of Directors the following four nominees to serve as Class I directors until the 2025 Annual Meeting of Stockholders: LYNNE M. DOUGHTIE, CARL M. ESCHENBACH, MICHAEL M. MCNAMARA, AND JERRY YANG ​	​	​		​	​	“FOR” each director nominee	​	​	Pages 6-14	​
​	2. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2023 ​	​	​		​	​	“FOR”	​	​	Pages 15-16	​
​	3. To approve, on an advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement ​	​	​		​	​	“FOR”	​	​	Page 17	​
​	4. To approve the 2022 Equity Incentive Plan (the "2022 Plan”) to replace our 2012 Equity Incentive Plan (the “2012 Plan”) ​	​	​		​	​	“FOR”	​	​	Pages 18-25	​
​	5. To approve the Amended and Restated 2012 Employee Stock Purchase Plan (the “Restated ESPP”) ​	​	​		​	​	“FOR”	​	​	Pages 26-29	​

​	NOMINEES	​	​	DIRECTOR SINCE	​	​	INDEPENDENT	​	​	CURRENT COMMITTEES	​
​	Lynne M. Doughtie, 59 Former U.S. Chairman and CEO, KPMG - US	​	​	2021	​	​		​	​	Audit	​
​	Carl M. Eschenbach, 55 General Partner, Sequoia Capital Operations, LLC	​	​	2018	​	​		​	​	Compensation, Investment	​
​	Michael M. McNamara, 65 Former CEO, Flex Ltd.	​	​	2011	​	​		​	​	Audit, Nominating & Governance	​
​	Jerry Yang, 53 Founding Partner of AME Cloud Ventures	​	​	2013	​	​		​	​	Compensation, Investment	​

2 | workday.com

PROXY STATEMENT SUMMARY​

 

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Focus on ownership

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Focus on innovation and performance

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Be fair and flexible

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2022 Proxy Statement | 3

PROXY STATEMENT SUMMARY

 

​

Name

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Title

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Cash Compensation (Salary and Bonus)

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Stock Awards

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All Other Compensation

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Total

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Aneel Bhusri

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​

Co-Founder, Co-Chief Executive Officer, and Chairman of the Board

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​

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$

65,000

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$

15,404,483

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$

2,961,923

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$

18,431,405

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James J. Bozzini

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Chief Operating Officer

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559,000

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9,756,190

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8,700

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10,323,890

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Luciano “Chano” Fernandez

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Co-Chief Executive Officer and Director

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1,384,938

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20,539,224

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91,351

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22,015,513

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Douglas A. Robinson(1)

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Co-President

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777,000

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11,699,995

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7,670

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12,484,665

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Richard H. Sauer

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Chief Legal Officer, Head of Corporate Affairs, and Corporate Secretary

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798,000

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5,134,741

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9,700

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5,942,441

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Robynne D. Sisco

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Co-President

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559,000

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9,756,190

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9,700

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10,324,890

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Our Business

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Fiscal 2022 Financial Highlights

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Environmental, Social, and Governance (“ESG”)​

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4 | workday.com

PROXY STATEMENT SUMMARY​

 

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ESG and our People

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~15,200 employees in 32 countries as of January 31, 2022

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ESG and the World Around Us

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ESG and our Customers​

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Stockholder Engagement

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60,000,000+​ We serve a community of more than 60 million workers at over 9,500 global customers

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Committed to Sustainability Listed on Corporate Knights' index of the world's 100 most sustainable corporations

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2022 Proxy Statement | 5

   

PROPOSAL NO. 1: ELECTION OF DIRECTORS

Our Board of Directors currently consists of 11 members. Our Certificate of Incorporation and Bylaws (together, our “formation documents”) provide for a classified Board consisting of three classes of directors, with directors serving staggered three-year terms. Directors in a particular class are nominated for additional three-year terms at the annual meeting of stockholders in the year in which their terms expire. As a result, only one class of directors is elected at each annual meeting, with the other classes continuing for the remainder of their respective three-year terms. Each director’s term continues until the election and qualification of his or her successor, or until his or her earlier resignation or removal.

Our formation documents also provide that our Board may make changes by resolution concerning the authorized number of directors and that any additional directorships resulting from an increase in the authorized number of directors shall be distributed among the three classes as the Board determines in its discretion. The formation documents further provide that our Board or our stockholders may fill vacant directorships, except that in the event that the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of common stock, only our Board may fill vacancies.

Vote Required

In February 2021, the Board of Directors amended and restated Workday’s Bylaws to implement a majority voting standard in uncontested director elections in place of the previous plurality standard. The revised Bylaws provide that if an incumbent director fails, in an uncontested election, to receive the affirmative vote of a majority of the votes properly cast, then the director shall tender his or her resignation to the Nominating and Governance Committee of the Board. That committee will then make a recommendation to the Board on whether to accept or reject the resignation, nominate a replacement, or recommend any other related action be taken.

Accordingly, for the 2022 Annual Meeting, the election of each nominee requires the affirmative vote of a majority of the votes properly cast by the holders of shares present or represented by proxy at the meeting. Neither abstentions nor broker non-votes will be counted as votes cast for or against a nominee.

Upon the recommendation of the Nominating and Governance Committee, the Board has designated the four nominees listed below for election at the Annual Meeting, each of whom currently serves as a director of Workday. Together with the other members of the Board, these nominees bring a wide variety of relevant skills, professional experience, and backgrounds, as well as diverse viewpoints and perspectives to represent the long-term interests of stockholders and to fulfill the leadership and oversight responsibilities of the Board. The following table sets forth certain information about each of our directors, including our nominees.

6 | workday.com

PROPOSAL NO. 1: ELECTION OF DIRECTORS​

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(1)

Independent member of the Board

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(2)

Member of the Audit Committee

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(3)

Member of the Compensation Committee

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(4)

Member of the Investment Committee

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(5)

Member of the Nominating and Governance Committee

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 = Lead Independent Director

2022 Proxy Statement | 7

PROPOSAL NO. 1: ELECTION OF DIRECTORS

 

Nominees for Director

8 | workday.com

PROPOSAL NO. 1: ELECTION OF DIRECTORS​

 

2022 Proxy Statement | 9

PROPOSAL NO. 1: ELECTION OF DIRECTORS

Continuing Directors

10 | workday.com

PROPOSAL NO. 1: ELECTION OF DIRECTORS​

 

2022 Proxy Statement | 11

PROPOSAL NO. 1: ELECTION OF DIRECTORS

 

12 | workday.com

PROPOSAL NO. 1: ELECTION OF DIRECTORS​

 

2022 Proxy Statement | 13

PROPOSAL NO. 1: ELECTION OF DIRECTORS

Board Diversity Matrix
As of May 10, 2022

The following chart shows certain self-identified personal characteristics of our directors and nominees, in accordance with Nasdaq Listing Rule 5605(f).

Total number of directors: 11

14 | workday.com

   

PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has appointed the firm of Ernst & Young LLP, an independent registered public accounting firm, to audit our consolidated financial statements for the year ending January 31, 2023. During our fiscal year ended January 31, 2022, Ernst & Young LLP served as our independent registered public accounting firm and has audited our consolidated financial statements since its appointment in 2008.

Notwithstanding its selection and even if our stockholders ratify the selection, our Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of Workday and its stockholders. At the Annual Meeting, the stockholders are being asked to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2023. Our Audit Committee is submitting the selection of Ernst & Young LLP to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of Ernst & Young LLP will be present at the Annual Meeting and they will have an opportunity to make statements and will be available to respond to appropriate questions from stockholders.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees billed or to be billed by Ernst & Young LLP and affiliates for professional services rendered with respect to the fiscal years ended January 31, 2022 and 2021. All of these services were approved by the Audit Committee.

​

(1)

Consists of fees billed for professional services rendered in connection with the audit of our consolidated financial statements, reviews of our quarterly consolidated financial statements, and audits of our statutory financial statements in non-U.S. jurisdictions.

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(2)

Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and not reported under “Audit Fees.” This primarily consists of fees for service organization control audits under Statement on Standards for Attestation Engagements No. 18.

​

(3)

Consists of fees in connection with tax compliance and tax consulting services.

​

Auditor Independence

Under its charter, the Audit Committee pre-approves audit and non-audit services rendered by our independent registered public accounting firm, Ernst & Young LLP. The Audit Committee has determined that the rendering of non-audit services for assurance and related services that are reasonably related to the performance of the audit services, audit-related services, tax services, and other services by Ernst & Young LLP is compatible with maintaining the principal accountants’ independence.

 

2022 Proxy Statement | 15

PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM​

Pre-Approval Policies and Procedures

Consistent with requirements of the SEC and the Public Company Accounting Oversight Board regarding auditor independence, our Audit Committee is responsible for the appointment, compensation, and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our Audit Committee (or its Chair if such approval is required prior to the next Audit Committee meeting) generally pre-approves of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services, and other services.

Vote Required

The ratification of the appointment of Ernst & Young LLP requires the affirmative vote of a majority of the votes properly cast by the holders of shares present or represented by proxy at the meeting. Neither abstentions nor broker non-votes will be counted as votes cast for or against this proposal.

16 | workday.com

   

PROPOSAL NO. 3: ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION

We are seeking an advisory, non-binding stockholder vote with respect to the compensation awarded to our named executive officers (or “NEOs”), referred to as a “Say-on-Pay” vote, for the fiscal year ended January 31, 2022, in accordance with the requirements of Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Our executive compensation program and the compensation paid to our NEOs are described on pages 52-66 of this Proxy Statement. Our compensation programs are overseen by the Compensation Committee and reflect our philosophy to pay all of our employees, including our NEOs, in ways that support the following principles that we believe reflect our core values:

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motivate, attract, and retain the best talent;

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•

support a high-performance culture by rewarding excellence and achievement;

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•

recognize and retain top-performing talent via differentiated rewards and opportunities;

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•

reinforce alignment with Workday’s values (in particular, a focus on excellence and an attitude of ownership);

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•

create alignment with Workday’s strategy and long-term performance; and

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•

provide an opportunity for each employee to share in the success we create together.

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To help achieve these objectives, we structure our NEOs’ compensation to reward the achievement of short-term and long-term strategic and operational goals.

Based on the above, we request that stockholders approve on a non-binding, advisory basis, the compensation of Workday’s NEOs as described in this Proxy Statement pursuant to the following resolution:

RESOLVED, that the compensation paid to Workday’s named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis” section, compensation tables, and narrative discussion, is hereby APPROVED.

Vote Required

Approval of our named executive officers’ compensation requires the affirmative vote of a majority of the votes properly cast by the holders of shares present or represented by proxy at the meeting. Neither abstentions nor broker non-votes will be counted as votes cast for or against this proposal.

As an advisory vote, this proposal is non-binding. Although the vote is non-binding, the Board and the Compensation Committee value the opinions of our stockholders and will consider the outcome of the vote when making future compensation decisions for our NEOs. Stockholders should be aware that this advisory vote occurs after significant NEO compensation decisions have been made in the current fiscal year. In addition, because the compensation elements integrate into an overall compensation package, it may not be possible or appropriate to change the compensation package to reflect the results of one year’s advisory vote on NEO compensation before the next annual meeting of stockholders.

Unless the Board modifies its policy on the frequency of holding advisory votes on NEO compensation, the next such advisory vote will occur at our 2023 Annual Meeting of Stockholders.

2022 Proxy Statement | 17

   

PROPOSAL NO. 4: APPROVAL OF THE 2022 EQUITY INCENTIVE PLAN

We are asking our stockholders to approve our new Workday, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) to replace our 2012 Equity Incentive Plan (the “2012 Plan”). If approved by our stockholders, the 2022 Plan will become effective on June 22, 2022, the date of our Annual Meeting. No additional shares will be issued under the 2012 Plan once the 2022 Plan becomes effective.

Our Board of Directors believes that the 2022 Plan will enable us to continue to attract, retain, and motivate talented individuals who will help achieve our strategic objectives and benefit all of our stockholders as a result. The 2022 Plan is intended to be the successor to our 2012 Plan, which was adopted by our Board of Directors in August 2012 and approved by our stockholders thereafter in connection with our initial public offering. The 2012 Plan will expire in October 2022. In light of the impending expiration of our 2012 Plan, our Board of Directors adopted the 2022 Plan on April 20, 2022, subject to approval by our stockholders. If the 2022 Plan is not approved by our stockholders, we may continue to issue awards under our 2012 Plan, but only until it expires in October 2022. We believe that if the 2022 Plan is not approved, our ability to attract and retain the talent we need to compete in our industry would be seriously and negatively impacted, and this would affect our long-term success. Accordingly, if the 2022 Plan is not approved, we would be required to seek approval from our stockholders for a new equity incentive plan at a special meeting prior to our 2023 annual meeting of stockholders, which would increase costs and be a distraction from our management team’s execution of our business goals. Likewise, we would possibly need to increase cash-based incentive compensation if we could not continue our equity compensation practice.

Equity Compensation Is a Critical Element of Our Compensation Program

We believe that our future success and our ability to remain competitive are dependent on our continuing efforts to attract, retain, and motivate highly qualified personnel. The market for skilled personnel in the software industry is very competitive. As we are headquartered in the Bay Area, we face intense competition among large and small firms in the Silicon Valley and greater Bay Area market. A cornerstone of our method for attracting and retaining top caliber talent has been our equity-based compensation programs, including the grant of time-based restricted stock units (“RSUs”) and, from time to time, performance-based RSUs (“PRSUs”). Providing employees the opportunity to participate in stock ownership, and in turn, our long-term future performance, helps align the objectives of our stockholders and our employees. Currently, we use new hire RSUs as a key tool in attracting top talent. We grant RSUs and, from time to time, PRSUs subject to time- and performance-based vesting, to certain employees on a targeted basis to incentivize retention and performance objectives. We also grant RSUs to our non-employee directors.

We Have Carefully Considered and Forecasted Our Need for Shares

We are requesting approval of 30,000,000 shares for the 2022 Plan, which our Board of Directors believes is reasonable and prudent. As of April 20, 2022, there were 51,974,231 shares available for grant under our 2012 Plan. If the 2022 Plan is approved, we will have 30,000,000 shares available for grant, which reflects a reduction of 21,974,231 shares relative to the number of shares currently authorized under the 2012 Plan. We will not “rollover” available shares from the 2012 Plan into the 2022 Plan. Additionally, unlike the 2012 Plan, the 2022 Plan will not include an evergreen provision, so there will not be an automatic increase in the number of shares available for grant under the 2022 Plan. If approved, we expect the shares to last approximately until our 2025 Annual Meeting. This number of shares should allow us to continue to grant awards to our employees, consultants, officers, and directors, which has been successful in attracting high-performing personnel and generating stockholder value, and enable us to respond to growth, market competition, and potential stock price fluctuations.

Our Compensation Committee thoughtfully manages our equity incentive programs to manage long-term stockholder dilution, burn rate, and stock-based compensation expense while maintaining our ability to attract, reward, and retain key talent in a hypercompetitive market. As a result of the Compensation Committee’s prudent management, we made

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the decision to forego the evergreen automatic increase under the 2012 Plan for fiscal 2021, 2022, and 2023. In evaluating the proposed 2022 Plan, our Board of Directors considered a number of factors, including the costs of the 2022 Plan and an analysis of certain burn rate, dilution, and overhang metrics as summarized below.

As of April 20, 2022, there were 253,668,066 million total shares of our Class A and Class B common stock outstanding. The closing market price of our Class A common stock on April 20, 2022, was $220.14.

We are committed to effectively managing our employee equity compensation programs in light of potential stockholder dilution. For this reason, we considered both our “burn rate” and our “overhang” in evaluating the impact of the 2022 Plan on our stockholders. We define “burn rate” as the number of equity awards granted during the year, divided by the weighted average total number of shares of common stock outstanding. The burn rate measures the potential dilutive effect of our outstanding equity grants. We define “overhang” as stock options outstanding but not exercised, plus outstanding full value awards (which include PRSUs, RSUs, and similar awards), plus shares available to be granted as equity awards, divided by the total number of shares of common stock outstanding. The overhang measures the potential dilutive effect of outstanding equity awards plus shares available for grant under our equity compensation plans. The burn rate and overhang figures included below are based on shares available for grant under our 2012 Plan, plus equity awards granted and outstanding under our 2012 plan and our 2005 Stock Plan (the “2005 Stock Plan”), as applicable, and exclude potential dilution resulting from shares issued pursuant to (i) awards remaining outstanding under the Adaptive Insights, Inc. 2013 Equity Incentive Plan (assumed in connection with an acquisition) (the “Adaptive Plan”), (ii) our 2012 Employee Stock Purchase Plan (the “ESPP”), or (iii) if approved, our Amended and Restated 2012 Employee Stock Purchase Plan. We assumed stock options outstanding but not exercised and outstanding RSUs under the Adaptive Plan, which were converted into stock options and RSUs to acquire 1,123,216 shares of our common stock in connection with our acquisition of Adaptive Insights, Inc. in August 2018. As of April 20, 2022, 127,059 of such assumed awards remained outstanding.

During the past three fiscal years, we granted equity awards under our 2012 Plan as summarized in the table below and our three-year average burn rate was approximately 3.09% for these years, as set forth in the table below.

Three-Year Average Burn Rate Calculation

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(1)

PRSUs are included at maximum achievement levels.

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Equity Awards Outstanding

As of April 20, 2022, there were (i) 253,668,066 total shares of our Class A and Class B common stock outstanding, (ii) 51,974,231 shares available for grant under our 2012 Plan, (iii) no shares available for grant under our 2005 Stock Plan, and (iv) equity awards outstanding under the 2012 Plan, our 2005 Stock Plan, and the Adaptive Plan as summarized in the table below. Accordingly, as of April 20, 2022, our 10,570,605 outstanding awards (not including awards under our ESPP, but including awards assumed in acquisitions) plus 51,974,231 shares available for future grant under our 2012 Plan represented approximately 24.66% of our common stock outstanding, which we refer to as our “overhang.”

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PROPOSAL NO. 4: APPROVAL OF THE 2022 EQUITY INCENTIVE PLAN

Please see the table below for a breakdown of the outstanding equity awards granted under the 2012 Plan, our 2005 Stock Plan and the Adaptive Plan, and the number of shares remaining for grant under our 2012 Plan, in each case as of April 20, 2022. The closing market price of our Class A common stock on April 20, 2022, was $220.14. The table below excludes awards under our ESPP.

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(1)

Includes 126,316 options assumed in acquisitions.

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(2)

Includes 743 RSUs and PRSUs assumed in acquisitions.

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(3)

Excludes awards under our ESPP.

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2022 Plan Share Pool & Expected Utilization

As noted above, none of the shares of our common stock that remain available for future grant of awards under the 2012 Plan will be added to the 2022 Plan. 30,000,000 shares of our common stock will be reserved and available for future grant of awards under the 2022 Plan. We believe, and the Compensation Committee considered, that the 2022 Plan will provide us with a share reserve that will allow us to make equity awards such as for new hires, consultant grants, refresh awards, any special retention needs, merger and acquisition activities, and non-employee director grants for approximately three years. We anticipate making future requests for additional increases in the share reserve periodically, so that we can continue to engage with our stockholders and allow them to routinely evaluate the 2022 Plan’s continued effectiveness. Circumstances such as changes in global economic conditions, business conditions, our compensation programs, merger and acquisition activity, or our strategy could alter this projection and our expectations.

Summary of the 2022 Equity Incentive Plan

The material terms of the 2022 Plan are summarized below. The summary is qualified in its entirety by reference to the full text of the 2022 Plan, which is attached as Appendix A to this Proxy Statement.

Purpose

The 2022 Plan provides for the grant of stock options, restricted stock awards, stock bonuses, stock appreciation rights, RSUs, and performance awards, as described below. The purpose of the 2022 Plan is to provide incentives to attract, retain, and motivate eligible persons whose present and potential contributions are important to our success.

Key Terms

The following is a summary of the key provisions of the 2022 Plan.

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New Plan Benefits

The following table shows the dollar value of shares subject to restricted stock units that will be granted, subject to approval by our Board of Directors, under our existing director compensation program in fiscal 2023 to each of our non-employee directors pursuant to the equity incentive grant formula set forth below if the 2022 Plan is approved by our stockholders.

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(1)

The number of shares of restricted stock units granted annually to each non-employee director under our existing director equity grant program is calculated as the dollar value divided by the trailing 20-day simple moving average stock price of our Class A common stock, using the 20 trading days prior to the date of grant (to occur after filing a Registration Statement on Form S-8 with respect to the 2022 Plan), rounded down to the nearest share.

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Future awards under the 2022 Plan to executive officers, employees, or other eligible participants, and any additional future discretionary awards to non-employee directors in addition to those granted pursuant to the grant formula described above, are discretionary and cannot be determined at this time. We therefore have not included any such awards in the table above.

Amendments

The Board may terminate or amend the 2022 Plan at any time, provided that no action may be taken by the Board if stockholder approval is required.

Recoupment

All awards under the 2022 Plan shall be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board of Directors or Compensation Committee, or required by law during the term of an individual’s employment or other service with our company, in each case that is applicable to our employees, directors, or other service providers. In addition to any other remedies available under any such policy and applicable law, the 2022 Plan may require the cancellation of outstanding awards and the recoupment of any gains realized with respect to awards.

Certain U.S. Federal Income Tax Consequences

The following is a general summary as of the date of this proxy statement of the United States federal income tax consequences to us and participants in the 2022 Plan. The federal tax laws may change and the federal, state, and local tax consequences for any participant will depend upon his or her individual circumstances. Each participant has been, and is, encouraged to seek the advice of a qualified tax advisor regarding the tax consequences of participation in the 2022 Plan.

Non-Qualified Stock Options

A participant will realize no taxable income at the time a non-qualified stock option is granted under the 2022 Plan, but generally at the time such non-qualified stock option is exercised, the participant will realize ordinary income in an amount equal to the excess of the fair market value of the shares on the date of exercise over the stock option exercise price. Upon a disposition of such shares, the difference between the amount received and the fair market value on the date of exercise will generally be treated as a long-term or short-term capital gain or loss, depending on the holding period of the shares. We will generally be entitled to a deduction for federal income tax purposes at the same time and in the same amount as the participant is considered to have realized ordinary income in connection with the exercise of the non-qualified stock option.

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PROPOSAL NO. 4: APPROVAL OF THE 2022 EQUITY INCENTIVE PLAN

Incentive Stock Options

A participant will realize no taxable income, and we will not be entitled to any related deduction, at the time any incentive stock option is granted. If certain employment and holding period conditions are satisfied, then no taxable income will result upon the exercise of such option, and we will not be entitled to any deduction in connection with the exercise of such stock option. Upon disposition of the shares after expiration of the statutory holding periods, any gain realized by a participant will be taxed as long-term capital gain and any loss sustained will be long-term capital loss, and we will not be entitled to a deduction in respect to such disposition. While no ordinary taxable income is recognized at exercise (unless there is a “disqualifying disposition,” see below), the excess of the fair market value of the shares over the stock option exercise price is a preference item that is recognized for alternative minimum tax purposes.

Except in the event of death, if shares acquired by a participant upon the exercise of an incentive stock option are disposed of by such participant before the expiration of the statutory holding periods (i.e., a “disqualifying disposition”), such participant will be considered to have realized as compensation taxed as ordinary income in the year of such disposition an amount, not exceeding the gain realized on such disposition, equal to the difference between the stock option price and the fair market value of such shares on the date of exercise of such stock option. Generally, any gain realized on the disposition in excess of the amount treated as compensation or any loss realized on the disposition will constitute capital gain or loss, respectively. If a participant makes a “disqualifying disposition,” generally in the fiscal year of such “disqualifying disposition,” we will be allowed a deduction for federal income tax purposes in an amount equal to the compensation realized by such participant.

Stock Appreciation Rights

A grant of a stock appreciation right (which can be settled in cash or our common stock) has no federal income tax consequences at the time of grant. Upon the exercise of stock appreciation rights, the value received is generally taxable to the recipient as ordinary income, and we generally will be entitled to a corresponding tax deduction.

Restricted Stock

A participant receiving restricted stock may be taxed in one of two ways: the participant (i) pays tax when the restrictions lapse (i.e., they become vested) or (ii) makes a special election to pay tax in the year the grant is made. At either time the value of the award for tax purposes is the excess of the fair market value of the shares at that time over the amount (if any) paid for the shares. This value is taxed as ordinary income and is subject to income tax withholding. We receive a tax deduction at the same time and for the same amount taxable to the participant. If a participant elects to be taxed at grant, then, when the restrictions lapse, there will be no further tax consequences attributable to the awarded stock until the recipient disposes of the stock, at which point any gain or loss will be short-term or long-term capital gain or loss, depending on the holding period of the stock prior to such disposition.

Restricted Stock Units

In general, no taxable income is realized upon the grant of a restricted stock unit award. The participant will generally include in ordinary income the fair market value of the award of stock at the time shares of stock are delivered to the participant or at the time the restricted stock unit vests. We generally will be entitled to a tax deduction at the time and in the amount that the participant recognizes ordinary income. Restricted stock units usually vest over a time period specified by the Board.

Performance Stock Units

Similar to restricted stock units, in general, no taxable income is realized upon the grant of a performance stock unit award. The participant will generally include in ordinary income the fair market value of the award of stock at the time shares of stock are delivered to the participant or at the time the performance stock unit vests. We generally will be entitled to a tax deduction at the time and in the amount that the participant recognizes ordinary income. Performance stock units usually vest upon the achievement of metrics established by the Board.

Performance Shares

The participant will not realize income when a performance share is granted, but will realize ordinary income when shares are transferred to him or her. The amount of such income will be equal to the fair market value of such transferred

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shares on the date of transfer. We will be entitled to a deduction for federal income tax purposes at the same time and in the same amount as the participant is considered to have realized ordinary income as a result of the transfer of shares.

ERISA Information

The 2022 Plan is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

Approval of the 2022 Plan

If the 2022 Plan is approved by our stockholders, it will become effective on the date of the Annual Meeting. Our Board of Directors intends to cause the additional shares of common stock that would become available for issuance to be registered on a Form S-8 Registration Statement to be filed with the SEC at our expense. If stockholders do not approve this proposal, the 2022 Plan will not become effective.

Vote Required

The approval of the 2022 Plan requires the affirmative vote of a majority of the votes properly cast by the holders of shares present or represented by proxy at the meeting. Neither abstentions nor broker non-votes will be counted as votes cast for or against this proposal.

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PROPOSAL NO. 5: APPROVAL OF THE AMENDED AND RESTATED 2012 EMPLOYEE STOCK PURCHASE PLAN

We are asking our stockholders to approve the amendment and restatement, in its entirety, of our 2012 Employee Stock Purchase Plan (the "Restated ESPP") to enable our employees to continue to purchase shares of our common stock under our 2012 Employee Stock Purchase Plan (the “ESPP”). Our Board of Directors adopted the Restated ESPP on April 20, 2022, subject to approval by our stockholders. The approval of this amendment and restatement of the ESPP will (i) extend the term of the ESPP, (ii) remove the automatic increase (“evergreen”) provision, and (iii) make certain clarifying revisions. We are not asking for any additional shares for the Restated ESPP. Extending the term of the Restated ESPP will enable use of its remaining, previously approved shares.

The Board of Directors believes that our success is due in large part to our highly talented employee base and that our future success depends on our ability to attract and retain high caliber personnel. The Restated ESPP will be an important incentive tool supporting us in our continued efforts to attract, retain, and motivate qualified personnel, while also aligning the long-term value creation objectives of our workforce with those of our stockholders.

If approved by our stockholders, the Restated ESPP will be effective June 22, 2022, the date of our Annual Meeting. If the Restated ESPP is not approved, the ESPP will expire on May 31, 2023, the 10-year anniversary of the first purchase date under the ESPP. The Restated ESPP will extend the term until the issuance of all of the shares of common stock reserved for issuance under the Restated ESPP or an earlier termination of the Restated ESPP by our Board of Directors.

As of April 20, 2022, there were approximately 5,731,795 shares available for issuance under the ESPP, which is expected to satisfy our equity needs for approximately five years or through our 2027 Annual Meeting of Stockholders. The total number of shares reserved under the Restated ESPP since its original adoption in 2012 is 11,650,917, which includes shares that have already been issued under the Restated ESPP and are no longer available for issuance. As noted above, no new shares are being requested for the Restated ESPP.

Summary of the Restated ESPP

The Restated ESPP provides eligible employees with an opportunity to purchase shares of our common stock at a discount through accumulated payroll deductions. The principal terms of the Restated ESPP are summarized below. This summary is qualified in its entirety by reference to the full text of the Restated ESPP, which is attached as Appendix B to this Proxy Statement.

The Restated ESPP, including the right of participants to make purchases under the Restated ESPP, is intended to qualify as an “Employee Stock Purchase Plan” under the provisions of Section 421 and 423 of the Code, although we may offer sub-plans or offerings that are not intended to meet the Section 423 requirements for employees outside the United States pursuant to the terms of the Restated ESPP. The provisions of the Restated ESPP shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of those sections of the Code. The Restated ESPP will not be a qualified deferred compensation plan under Section 401(a) of the Code, and is not subject to the provisions of ERISA.

Purpose

The purpose of the Restated ESPP is to provide our employees with a means of acquiring an equity interest in Workday through payroll deductions, to enhance such employees’ sense of participation in our business, and to provide an incentive for continued employment through the opportunity to acquire equity at a discounted price.

Shares Reserved for Issuance

As of April 20, 2022, there were approximately 5,731,795 shares available for issuance under the ESPP. The total number of shares reserved under the Restated ESPP since its original adoption in 2012 is 11,650,917, which includes

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shares that have already been issued under the Restated ESPP and are no longer available for issuance. The Restated ESPP does not include an evergreen provision, thereby eliminating an annual automatic increase of shares. The closing price per share of our Class A common stock on April 20, 2022, was $220.14. We are not asking for any additional shares for the Restated ESPP. Extending the term of the Restated ESPP will enable use of its remaining, previously approved shares.

Offering Periods

The Restated ESPP is currently expected to be administered through consecutive six-month periods referred to as “Offering Periods,” commencing on each December 1 and June 1, and ending on the succeeding May 31 and November 30, respectively. The Compensation Committee may change the duration and structure of future Offering Periods in accordance with the terms of the Restated ESPP, provided that no Offering Period may extend for a period longer than 27 months.

On the first trading day of each Offering Period (the “Offering Date”), each eligible employee who has properly enrolled in that Offering Period in accordance with the rules prescribed by the Compensation Committee will be granted an option to purchase shares of our common stock to be funded by payroll deductions, based on the participant’s elected contribution rate. Unless a participant has properly withdrawn from the Offering Period, each option granted under the Restated ESPP will automatically be exercised on the last trading day of the Offering Period (the “Purchase Date”). The purchase price will be equal to 85% of the lesser of the fair market value of our common stock on (i) the Offering Date and (ii) the Purchase Date.

Plan Administration

The Restated ESPP will be administered by our Compensation Committee. Subject to the terms of the Restated ESPP, the Compensation Committee will have the authority to, among other matters, determine the eligibility of participants, determine the terms and conditions of offerings under the Restated ESPP, and construe and interpret the terms of the Restated ESPP.

Eligibility

Generally, all of our employees, and employees of any of our subsidiaries designated by the Compensation Committee, will be eligible to participate in the Restated ESPP; provided that employees who own (or are deemed to own as a result of stock attribution rules) stock constituting 5% or more of the total combined voting power or value of all classes of our stock or any of our subsidiaries will not be permitted to participate in the Restated ESPP. The Compensation Committee may, in its discretion, exclude the following categories of employees from participation: (i) employees who are not employed prior to the beginning of an Offering Period, (ii) employees who are customarily employed 20 hours or less per week in a calendar year; (iii) employees who are customarily employed five months or less in a calendar year; (iv) certain “highly compensated” employees; (v) employees who are citizens or residents of a foreign jurisdiction, if such employee’s participation is prohibited under the laws of the jurisdiction governing such employee or compliance with the laws of the foreign jurisdiction would violate the requirements of Section 423 of the Code; (vi) employees who do not meet any other eligibility requirements that the Compensation Committee may choose to impose (within the limits permitted by the Code); and (vii) individuals who provide services to Workday who are reclassified as common law employees for any reason except for federal income and employment tax purposes.

As of April 20, 2022, approximately 15,900 of our employees would be eligible to participate in the Restated ESPP.

Enrollment in the Restated ESPP

Eligible employees become participants in the Restated ESPP by completing a subscription agreement or enrolling online authorizing payroll deductions prior to the applicable Offering Date. A person who becomes employed after the commencement of an Offering Period may not participate in the Restated ESPP until the commencement of the next Offering Period.

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Contribution and Purchase Limitations

Unless otherwise determined by the Compensation Committee in accordance with the terms of the Restated ESPP, no participant may (i) elect a contribution rate of more than 15% of his or her compensation (as defined in the Restated ESPP) for the purchase of shares under the Restated ESPP; (ii) purchase more than 1,500 shares of our common stock (which limit the Compensation Committee may increase or decrease provided such limit does not exceed 10,000 shares) under the Restated ESPP on any one Purchase Date; or (iii) purchase shares that have a fair market value of more than $25,000, determined as of the Offering Date, in any calendar year in which the Offering Period is in effect.

Certain Corporate Transactions

If the number of outstanding shares of our common stock is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification, or similar change in our capital structure without consideration, then the Compensation Committee will proportionately adjust the number of shares available under the Restated ESPP, the purchase price, the number of shares any participant has elected to purchase, and the limit on the number of shares a participant may purchase on any one Purchase Date.

In the event of a Corporate Transaction (as defined in the Restated ESPP), each outstanding right to purchase common stock under the Restated ESPP will be assumed or an equivalent option substituted by the successor corporation. In the event that the successor corporation refuses to assume or substitute for the purchase right, the Offering Period with respect to which such purchase right relates will be shortened and provide for a new final Purchase Date, which shall occur on or prior to the consummation of the Corporate Transaction, as determined by the Compensation Committee. The Restated ESPP shall terminate on the closing of the Corporate Transaction.

Term; Amendments and Termination

The Restated ESPP terminates upon the issuance of all of the shares of common stock reserved for issuance under the Restated ESPP or an earlier termination of the Restated ESPP by our Board of Directors or our Compensation Committee. The Compensation Committee may generally amend, suspend, or terminate the Restated ESPP at any time without stockholder approval, except as may be required by applicable law or exchange listing rules.

Certain U.S. Federal Income Tax Consequences

The following is a general summary of the United States federal income tax consequences to us and to participants in the Restated ESPP based on tax laws in effect as of the date of this proxy statement. This summary is not intended to be exhaustive and does not address all matters that may be relevant to any particular participant. Among other considerations, this summary does not describe the tax laws of any state, municipality or foreign jurisdiction, or describe gift, estate, excise, payroll or other employment taxes. Participants are advised to consult with their tax advisors regarding the tax consequences of participation in the Restated ESPP. The Restated ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code and the following discussion is based on the assumption that it is so qualified.

Each participant’s payroll deductions under the Restated ESPP will be made on an after-tax basis. Generally, the participant will not recognize any taxable income at the time he or she is granted an option to purchase shares of common stock during an Offering Period or at the time the option is exercised to purchase shares on behalf of the participant. The participant will generally only recognize taxable income (or loss) on the date the participant sells or otherwise disposes of the acquired shares. The particular tax consequence depends on the length of time such shares are held by the participant prior to the sale or disposition.

If the shares are sold or disposed of more than two years from the first day of the Offering Period during which the shares were purchased, and more than one year from the Purchase Date or if the participant dies while holding the shares, the participant (or his or her estate) will recognize ordinary income measured as the lesser of (i) the amount by which the fair market value of the shares on the Offering Date exceeded the purchase price of the shares (calculated as though the shares had been purchased on the Offering Date) and (ii) the excess of the fair market value of the shares at the time of such sale or other disposition over the purchase price. Any additional gain will be treated as long-term capital gain. If the shares are held for the holding periods described above but are sold for a price that is less than the purchase price, there is no ordinary income and the participating employee has a long-term capital loss for the difference between the sale price and the purchase price. If the shares are sold or otherwise disposed of before the

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expiration of either of the holding periods described above, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on how long the shares were held following the date they were purchased by the participant prior to disposing of them.

We are generally not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent of ordinary income recognized upon a sale or disposition of shares prior to the expiration of the holding periods described above.

New Plan Benefits

Participation in the Restated ESPP is voluntary and each eligible employee will have the discretion to determine whether and to what extent to participate in and contribute to the Restated ESPP. Accordingly, the benefits and amounts that will be received or allocated to officers and other employees under the Restated ESPP are not determinable at this time. Our non-employee directors will not be eligible to participate in our Restated ESPP. We are not asking for any additional shares for the Restated ESPP. Extending the term of the Restated ESPP will enable use of its remaining, previously approved shares.

Historical Plan Benefits

The closing price per share of our Class A common stock on April 20, 2022 was $220.14. The following table shows, as to each of the individuals or groups indicated, the aggregate number of shares of common stock purchased under the ESPP since its inception through April 20, 2022. Our non-employee directors are not eligible to participate in our ESPP.

Vote Required

The approval of the Restated ESPP requires the affirmative vote of a majority of the votes properly cast by the holders of shares present or represented by proxy at the meeting. Neither abstentions nor broker non-votes will be counted as votes cast for or against this proposal.

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DIRECTORS AND CORPORATE GOVERNANCE

Corporate Governance

Workday is committed to effective corporate governance that is informed by our stockholders, promotes the long-term interests of our stockholders, and strengthens Board and management accountability. Our Corporate Governance Guidelines establish the governance framework within which the Board conducts its business and fulfills its responsibilities. These guidelines are available on our website at www.workday.com/governanceguidelines. The Board regularly reviews our Corporate Governance Guidelines in light of legal and regulatory requirements, evolving best practices, and other developments, and approves updates as appropriate.

Our Board has taken a thoughtful approach to board composition to ensure that our directors have backgrounds that collectively add significant value to the strategic decisions made by the Company and that enable them to provide oversight of management to ensure accountability to our stockholders. In addition to a strong, independent Board, we are committed to a corporate governance structure that promotes long-term stockholder value creation through a sound leadership structure and by providing our stockholders with both the opportunity to provide direct feedback and key substantive rights to help ensure accountability.

Code of Conduct

We have adopted a Code of Conduct that applies to all of our directors, officers, employees, and contractors. The Code of Conduct helps simplify our commitment to integrity by providing a framework for doing the right thing. Our Code of Conduct is available on our website at https://www.workday.com/code-of-conduct.

Risk Oversight by Our Board of Directors

Our Board exercises its risk oversight function both directly and indirectly through its various committees. It reviews strategic and operational risks, including cybersecurity risks, in the context of reports from the management team on a regular basis, receives reports on all significant committee activities at each regular meeting, and evaluates the risks inherent in significant transactions. Our Board assists in determining the appropriate level of risk for our company, assesses the specific risks that we face, and reviews management’s strategies for adequately mitigating and managing identified risks.

Our Audit Committee, Nominating and Governance Committee, and Compensation Committee support our Board in discharging its risk oversight duties and address risks inherent in their respective areas. We believe this division of responsibilities is an effective approach for addressing the risks we face, and that our Board leadership structure supports this approach.

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Security, Privacy, and Trust

At Workday, keeping our customers' data secure is among our top priorities. We employ rigorous measures at the organizational, architectural, and operational levels to help ensure that customer data, applications, and infrastructure remain safe and in compliance with global privacy laws and regulations. Our Board of Directors devotes significant time to our privacy practices as well as cyber security and information security risk and cyber incident preparedness and response. Our Chief Privacy Officer reports at least annually to the Board and our Chief Information Security Officer regularly reports to the Audit Committee and the Board on cyber threats, incident response, and our security framework.

Stockholder Engagement

Our Board values and takes seriously the views of our stockholders, regularly reviews current governance and executive compensation policies and practices, risk oversight, and culture and human capital issues, and will consider appropriate changes as we grow and mature. In addition to our Annual Meeting each year, we provide stockholders with opportunities to deliver feedback on our corporate governance, compensation programs, sustainability practices, and other areas. Our Investor Relations team regularly meets with investors and investment analysts. Meetings often include participation by our business leaders and members of our Legal, Environmental Sustainability, Executive Compensation, and Belonging and Diversity teams.

In fiscal 2022, specific meetings with our stockholders included:

•

Financial performance;

​

•

Board composition, corporate governance, and our dual-class share structure;

​

•

Our executive compensation program including alignment of pay with performance; and

​

•

ESG matters and disclosure, including diversity and inclusion and sustainability metrics, initiatives, and disclosures.

​

We intend to continue the dialogue with our stockholders on these matters and will consider stockholder feedback along with best practices, market standards, and applicable regulations in making governance and other key board decisions.

Communications with the Board of Directors

Stockholders and other interested parties wishing to communicate about bona fide issues or questions with the Board or with an individual member of the Board may do so by writing to the Board or to the particular member of the Board, care of the Corporate Secretary at generalcounsel@workday.com or by mail to the Corporate Secretary, Workday, Inc., 6110 Stoneridge Mall Road, Pleasanton, California 94588. The communication should indicate that it contains a stockholder or interested party communication. All such communications will be forwarded to the director or directors to whom the communications are addressed. Workday will generally not forward to the Board a communication that it determines to be primarily commercial in nature or related to an improper or irrelevant topic, or that requests general information about Workday.

Director Independence

Our Class A common stock is listed on the Nasdaq Global Select Market. The listing rules of this stock exchange generally require that a majority of the members of a listed company’s board of directors be independent. Our Board of Directors has determined that none of our directors who are not current or former employees (Messrs. Eschenbach, McNamara, Still, Styslinger, and Yang and Mses. Campbell, Davies, and Doughtie) has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of the Nasdaq Global Select Market.

Leadership Structure

Our corporate governance framework provides the Board of Directors flexibility to determine the appropriate leadership structure for Workday. The Board does not require the separation of the offices of Chairman of the Board and Chief Executive Officer. The Board may appoint a Chairman of the Board and Vice Chairmen of the Board, at least one of

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whom will be an independent director. If the role of Chairman is filled by a director who does not qualify as an independent director, the Board will designate a lead independent director.

Mr. Bhusri and Mr. Fernandez serve as our Co-Chief Executive Officers and as members of our Board. Mr. Bhusri assumed the role of Chairman of the Board in April 2021. Because our Chairman is a current executive officer of Workday, Mr. Still also serves as a Vice Chairman and Lead Independent Director of the Board. Our Board believes that the current leadership structure, coupled with a strong emphasis on independence, provides effective independent oversight of management while allowing the Board and management to benefit from the extensive executive leadership and operational experience of Messrs. Bhusri and Fernandez. Independent directors and management sometimes have different perspectives and roles in strategy development. Our independent directors bring experience, oversight, and expertise from outside of our company, while Messrs. Bhusri and Fernandez bring company-specific experience and expertise. In February 2022, David Duffield, Workday’s co-founder and former Co-Chief Executive Officer, resigned as a member of the Board and as Chairman Emeritus, and was appointed to the newly formed role of CEO Emeritus of Workday, an honorary, non-officer role, and serves as an advisor to the management of Workday and the Board.

Lead Independent Director

Mr. Still serves as Vice Chairman and as Lead Independent Director of the Board of Directors. As Lead Independent Director, among other responsibilities, Mr. Still presides over regularly scheduled meetings at which only our independent directors are present; serves as a liaison between the Co-Chief Executive Officers, Chairman, and the independent directors; and performs such additional duties as our Board may otherwise determine and delegate.

Executive Sessions of Independent Directors

In order to promote open discussion among independent directors, our Board of Directors has a policy of conducting executive sessions of independent directors during each regularly scheduled Board meeting and at such other times if requested by an independent director. These executive sessions are chaired by our Lead Independent Director. The Lead Independent Director provides feedback to Workday’s Co-Chief Executive Officers, as needed, promptly after the executive sessions.

Meetings of the Board of Directors

The Board met seven times during fiscal 2022 and took action by unanimous written consent three times. No director attended fewer than 75% of the total number of meetings of the Board and of any Board committees of which he or she was a member during fiscal 2022.

It is our policy that directors are invited and encouraged to attend our annual meetings of stockholders. All members of the Board during fiscal 2022 attended our annual meeting held on June 8, 2021. We have scheduled our 2022 Annual Meeting on the same day as a regularly scheduled Board meeting in order to facilitate attendance by our Board members.

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Committees of the Board of Directors

Our Board has established an Audit Committee, a Compensation Committee, a Nominating and Governance Committee, and an Investment Committee. The current composition and functions of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our Board. The following table provides membership information for each of our Board committees:

Our Audit Committee is composed of Mses. Davies and Doughtie, and Messrs. McNamara and Styslinger, each of whom is independent and financially literate within the meaning of the Nasdaq Global Select Market rules. Ms. Davies is the Chair of the committee. Each of Mses. Davies and Doughtie, and Messrs. McNamara and Styslinger also satisfies the independence requirements of Rule 10A-3 of the Exchange Act. Mses. Davies and Doughtie, and Mr. Styslinger are each an Audit Committee financial expert, as that term is defined under SEC rules, and possess financial sophistication as defined under the rules of the Nasdaq Global Select Market. The designation does not impose on any of them any duties, obligations, or liabilities that are greater than are generally imposed on members of our Audit Committee and our Board of Directors.

The Audit Committee met eight times during fiscal 2022 and took action by unanimous written consent one time. The committee is directly responsible for, among other things:

•

selecting a firm to serve as the independent registered public accounting firm to audit our financial statements;

​

•

ensuring the independence of the independent registered public accounting firm;

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•

discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and that firm, our interim and year-end operating results;

​

•

establishing procedures for employees to submit concerns anonymously about questionable accounting or audit matters or alleged violations of our Code of Conduct or applicable laws;

​

•

considering the adequacy of our internal controls and internal audit function;

​

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•

overseeing our overall enterprise risk management framework and reviewing our major financial risk exposures, cybersecurity and other information technology risks, and processes to manage risk;

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•

overseeing our global ethics and compliance function;

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•

reviewing proposed waivers of the Code of Conduct for directors and executive officers;

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•

reviewing material related party transactions or those that require disclosure; and

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•

approving or, as permitted, pre-approving all audit and non-audit services to be performed by the independent registered public accounting firm.

​

The Audit Committee operates under a written charter that was adopted by our Board and satisfies the applicable standards of the SEC and the Nasdaq Global Select Market. The Audit Committee charter is available on our website at www.workday.com/audit-committee-charter.

Our Compensation Committee is composed of Messrs. Still, Eschenbach, and Yang, each of whom is independent within the meaning of the Nasdaq Global Select Market rules. Mr. Still is the Chair of our Compensation Committee. Each member of the committee is also a “non-employee director” under Rule 16b-3(b)(3)(i) of the Exchange Act and is free from any relationship that, in the opinion of our Board, would interfere with the exercise of independent judgment as a Compensation Committee member.

The Compensation Committee met six times during fiscal 2022 and took action by unanimous written consent 13 times. The committee is responsible for, among other things:

•

reviewing and approving, or recommending that our Board approve, the compensation of our executive officers;

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•

reviewing and recommending to our Board the compensation of our directors;

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•

reviewing and approving, or recommending that our Board approve, the terms of any employment arrangements with our executive officers;

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•

reviewing and approving the selection of peer companies used for compensation analysis;

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•

reviewing and approving, or recommending that our Board approve, any amendment of our recoupment policies and practices and stock ownership guidelines applicable to our Board and/or executive officers;

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•

administering our stock and equity incentive plans;

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•

reviewing and approving, or making recommendations to our Board with respect to, incentive compensation and equity plans;

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•

reviewing our strategies and policies related to human capital management, including belonging and diversity;

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•

reviewing our major compensation and human capital-related risk exposures; and

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•

reviewing our overall compensation philosophy.

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The Compensation Committee operates under a written charter that was adopted by our Board and satisfies the applicable standards of the SEC and the Nasdaq Global Select Market. The Compensation Committee charter is available on our website at www.workday.com/compensation-committee-charter.

Our Nominating and Governance Committee is composed of Messrs. McNamara and Still and Mses. Campbell and Davies, each of whom is independent within the meaning of the Nasdaq Global Select Market rules. Mr. McNamara is the Chair of our Nominating and Governance Committee.

The Nominating and Governance Committee met five times during fiscal 2022. The committee is responsible for, among other things:

•

identifying and recommending candidates for membership on our Board of Directors;

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•

reviewing and recommending our Corporate Governance Guidelines and policies;

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•

overseeing and periodically reviewing our policies and programs concerning environmental sustainability, social responsibility, and governance, as well as our participation and visibility as a global corporate citizen;

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•

conducting an annual review of the independence of the non-employee directors and members of the Nominating and Governance Committee, the Audit Committee, and the Compensation Committee;

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•

reviewing and recommending the composition of our Board and its committees in light of the current needs of the Board, including determining whether it may be appropriate to add or remove directors after considering issues of judgment, diversity, age, skills, background, and experience;

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•

overseeing the process of evaluating the performance of our Board;

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•

reviewing any feedback received from stockholder engagement efforts and reviewing any proposals properly submitted by stockholders for action at annual meetings of stockholders and making recommendations to our Board regarding action to be taken in response to such proposals; and

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•

assisting our Board on other corporate governance matters.

​

The Nominating and Governance Committee operates under a written charter that was adopted by our Board and satisfies the applicable standards of the SEC and the Nasdaq Global Select Market. The Nominating and Governance Committee charter is available on our website at www.workday.com/nominating-governance-committee-charter.

Our Investment Committee is composed of Messrs. Yang, Bhusri, Eschenbach, and Still. Mr. Yang is the Chair of our Investment Committee. Our Investment Committee is responsible for reviewing and approving, or recommending that the Board of Directors approve, certain mergers, acquisitions, joint ventures, and investments, and working with management to develop effective and scalable processes for the review and execution of such transactions. The Investment Committee met four times during fiscal 2022.

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee is, or at any time during the past year has been, an officer or employee of ours. None of our executive officers currently serve, or in the past year has served, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.

Considerations in Evaluating Director Nominees

The Nominating and Governance Committee is responsible for identifying, evaluating, and recommending candidates to the Board of Directors for Board membership, or the Board may conduct the process of identifying and evaluating Board candidates directly. A variety of methods are used to identify and evaluate director nominees, with the goal of maintaining and further developing an experienced and highly qualified Board. Candidates may come to our attention through current members of our Board, professional search firms, stockholders, or other persons.

The Nominating and Governance Committee will recommend to the Board for selection all nominees to be proposed by the Board for election by the stockholders, including approval or recommendation of a slate of director nominees to be proposed by the Board for election at each annual meeting of stockholders, and, if requested by the Board, will recommend all director nominees to be appointed by the Board to fill interim director vacancies.

The Board will be responsible for nominating members for election to the Board and for filling vacancies on the Board that may occur between annual meetings of stockholders. The Board may, either directly or upon the recommendation of the Nominating and Governance Committee, consider the minimum qualifications set forth below, any specific qualities or skills that it believes are necessary for one or more of the Board members to possess, and the desired qualifications, expertise, and characteristics of Board members.

Director Qualifications

The Nominating and Governance Committee and the Board of Directors believe that candidates for director should have certain minimum qualifications, including, without limitation:

•

demonstrated business acumen and leadership, and high levels of accomplishment;

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•

experience with high-growth companies and global public companies;

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•

ability to exercise sound business judgment and to provide insight and practical wisdom based on experience;

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•

commitment to understand Workday and its business, industry, and strategic objectives;

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•

integrity and adherence to high personal ethics and values, consistent with our Code of Conduct;

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•

ability to read and understand financial statements and other financial information pertaining to Workday;

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commitment to enhancing stockholder value;

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willingness to act in the interest of all stockholders; and

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•

for directors who are not current or former employees, independence under Nasdaq Global Select Market listing standards and other applicable rules and regulations.

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In the context of the Board’s existing composition, other requirements that are expected to contribute to the Board’s overall effectiveness and meet the needs of the Board and its committees may be considered.

In addition, under Workday’s Corporate Governance Guidelines, the Board and each of its committees conduct a self- evaluation annually, which considers responsibilities under their charters and best practices. The Nominating and Governance Committee oversees each individual director’s performance, the Board of Director’s performance, and the operation and composition of each committee. Also, a director is expected to spend the time and effort necessary to properly discharge such director’s responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board and committees on which such director sits, and to review prior to meetings material distributed in advance for such meetings. Thus, the number of other public company boards and other boards (or comparable governing bodies) on which a prospective nominee is a member, as well as his or her other professional responsibilities, will be considered. To help ensure that our directors devote sufficient time to carry out their duties and responsibilities effectively, our Corporate Governance Guidelines provide that each director may not serve on more than three other public company boards without prior approval of the Nominating and Governance Committee and that each director should engage in discussion with our Nominating and Governance Committee prior to accepting an invitation to serve on a public or for-profit private company board of directors. Also, under the Corporate Governance Guidelines, there are no limits on the number of three-year terms that may be served by a director. However, in connection with evaluating recommendations for nomination for re-election, director tenure is considered.

When considering nominees, our Nominating and Governance Committee may take into consideration many factors including, among other things, a candidate’s independence, integrity, financial and other business expertise, breadth of experience, relevant skills, and experience in and knowledge about our business or industry. Additionally, although Workday does not have a formal diversity policy with regards to directors, Workday values diversity on a company- wide basis and endeavors to assemble a board with diverse perspectives and demographics (e.g., age, race, gender) and is in compliance with the board diversity requirements of Nasdaq and the State of California. The committee does not assign specific weights to any particular criteria and reviews the candidate’s qualifications in light of the specific needs of the Board at that time.

Stockholder Recommendations for Nominations to the Board of Directors

The Nominating and Governance Committee will consider properly submitted stockholder recommendations for candidates for our Board who meet the minimum qualifications as described above. The committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. A stockholder of record can nominate a candidate for election to the Board by complying with the procedures in Article I, Section 1.12 of our Bylaws. Any eligible stockholder who wishes to submit a nomination should review the requirements in the Bylaws on nominations by stockholders. Any nomination should be sent in writing to the Corporate Secretary, Workday, Inc., 6110 Stoneridge Mall Road, Pleasanton, California 94588. Submissions must include the full name of the proposed nominee, complete biographical information, a description of the proposed nominee’s qualifications as a director, other information specified in our Bylaws, and a representation that the nominating stockholder is a registered stockholder or a beneficial owner of shares held in street name and has held their stock for at least one year. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. These candidates are evaluated at meetings of the Nominating and Governance Committee and may be considered at any point during the year. If any materials are provided by a stockholder in connection with the recommendation of a director candidate, such materials are forwarded to the Nominating and Governance Committee.

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All proposals of stockholders that are intended to be presented by such stockholder at an annual meeting of stockholders must be in writing and notice must be delivered to the Corporate Secretary at the principal executive offices of Workday not later than the dates described below under “Additional Information — Stockholder Proposals for 2023 Annual Meeting.”

Non-Employee Director Compensation

Under our current compensation practices, our non-employee directors receive equity compensation for their service as directors, which we believe reinforces alignment with our stockholders and is consistent with our overall compensation philosophy. Our Board has historically approved annual refresh grants for our non-employee directors in respect of their Board and committee service at levels recommended by our Compensation Committee. Our compensation practices for non-employee directors are reviewed annually by our Compensation Committee. In addition, our executive compensation consultant, Semler Brossy Consulting Group, analyzes the competitive position of our director compensation program against the peer group used to review our executive compensation and examines how our director compensation levels, practices, and design features compare to members of our compensation peer group. Our Compensation Committee reviews this peer group to assess our director compensation against companies that have a similar size and growth trajectory as Workday and have similar business characteristics, such as companies focused on cloud applications or enterprise software. You can find additional information on our compensation peer group in the Compensation Discussion and Analysis section included elsewhere in this Proxy Statement.

During fiscal 2022, in accordance with the practices described above, our Compensation Committee reviewed our non-employee director compensation program and recommended that, to position more competitively against our peers, the Board increase the annual refresh grant of restricted stock units (“RSUs”) to our non-employee directors from $300,000 to $320,000 worth of RSUs and maintain the additional grant level of RSUs to the Chairman, Vice Chairman, Lead Independent Director, and Committee members at the same levels disclosed in our 2021 Proxy Statement, which are set forth in the table below. The number of RSUs awarded to each director is determined by dividing the value of RSUs approved by the Board for each director by the trailing 20-day simple moving average stock price of Workday’s Class A common stock, calculated using the 20 trading days prior to the date of grant. These equity awards vest in one annual installment on May 15th of the year following the year of grant, assuming continuous service through the vest date.

Additionally, upon joining our Board, a non-employee director will generally be granted an initial equity award in connection with his or her appointment to the Board. New directors joining our Board between annual meetings may also receive a pro-rated annual grant. Our 2012 Equity Incentive Plan provides, and our 2022 Equity Incentive Plan, if approved, will provide, that a non-employee director may receive awards representing no more than $750,000 total value in any calendar year, and a newly appointed non-employee director may receive awards up to $1,750,000 in total value in the calendar year in which the individual first becomes a non-employee director, provided that any initial award granted in connection with the commencement of his or her initial service as a non-employee director shall not exceed $1,000,000 in value.

Consistent with the above, in fiscal 2022, the Compensation Committee granted awards to the non-employee directors as set forth in the following table. We also reimburse directors for travel expenses incurred in connection with attendance at Board meetings and other Workday events and for expenses incurred for continuing education related to their service as directors. Other than as set forth in the table below, in fiscal 2022, we did not pay any fees to, make any equity awards or non-equity awards to, or pay any other compensation to any person who served as a non-employee director for all or a portion of fiscal 2022 in respect of their service as members of our Board.

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​

(1)

RSU awards shown in the table above vest in full on May 15, 2022, assuming continuous service through such date.

​

(2)

The amounts included in the “Value of RSU Award on the Date of Grant” column represent the aggregate grant date fair value of the RSU awards calculated in accordance with Financial Accounting Standards Board, Accounting Standards Codification (“ASC”) Topic 718. The grant date fair value of each RSU award is measured based on the closing price of our Class A common stock on the date of grant.

​

(3)

Mr. Duffield’s RSU award was terminated on February 24, 2022, in connection with his resignation from the Board.

​

(4)

Mr. Bush’s RSU award was terminated on September 16, 2021, in connection with his resignation from the Board.

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(5)

As previously disclosed in our 2021 Proxy Statement, Ms. Doughtie was also granted RSUs in the amount of $750,000 in connection with her appointment to our Board on February 23, 2021, one-fourth of which vested on March 15, 2022, and the balance of which will vest in equal installments over the following 12 quarters, assuming continuous service through the applicable vesting dates.

​

The following table provides information regarding outstanding equity awards held by non-employee directors as of January 31, 2022:

​

(1)

All options are fully vested.

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(2)

The market value of unvested RSUs is calculated by multiplying the number of unvested shares held by the applicable director by the closing price of our Class A common stock on January 31, 2022, the last trading day of our fiscal year, which was $253.01.

​

(3)

Mr. Duffield’s RSU award was terminated on February 24, 2022, in connection with his resignation from the Board.

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(4)

Mr. Bush’s RSU awards were terminated on September 16, 2021, in connection with his resignation from the Board.

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ESG at Workday*

ESG and Our People

When Workday was founded in 2005, co-founders Aneel Bhusri and David Duffield wanted to make one thing clear: culture comes first. With a strong belief that happy employees lead to happy customers, maintaining a strong culture of inclusivity, belonging, and fun was integral to the foundation of Workday. This culture-first philosophy has helped shape Workday into the global leader that it is today, and our people continue to be a top priority.

Our core values give us a framework for leadership, daily decisions, and employee satisfaction, and help us enjoy our time at work. Staying true to our values has helped to preserve our culture, even virtually, and has guided our decisions to help protect and take care of our people, our customers, and our communities.

Our compensation philosophy is designed to establish and maintain a fair and flexible compensation program that attracts and rewards talented individuals who possess the skills necessary to support our near-term objectives, create long-term value for our stockholders, grow our business, and assist in the achievement of our strategic goals. We believe that providing employees with competitive pay, ownership in the company, and a wide range of benefits is fundamental to employees feeling valued, motivated, and recognized for their contributions. Equity ownership is a key element of our compensation program, allowing employees to share in Workday’s successes and aligning the interests of our employees with our stockholders. Starting in the fourth quarter of fiscal 2022, we have extended our key employee cash bonus program to all employees not covered under an existing sales or customer experience incentive plan. Additionally, our total rewards package includes an employee stock purchase plan, healthcare and retirement benefits, paid time off, family leave, and other wellness programs. It also offers specialized benefits such as support for fertility options and new parents, as well as reimbursement of adoption costs. In the wake of the COVID-19 pandemic, we felt that it was important for employees to have a safe, convenient way to access healthcare and have introduced a global virtual healthcare network and onsite healthcare resources, including COVID-19 vaccine and testing drive-thru clinics and flu shot clinics, in addition to expanded healthcare benefits.

We strive to be a workplace where all employees are valued for their unique perspectives and where we all collectively contribute to Workday’s success and innovation. Belonging and Diversity ("B&D") plays an integral part in that as we aim to provide our employees with programs and resources that strengthen our culture and empower our communities. In support of our efforts, we have created our own unique approach to diversity called VIBE, which stands for Value Inclusion, Belonging, and Equity.

To further support equity in our workplace and in our communities, we have established four guiding principles: hiring and developing diverse talent; cultivating a culture of belonging; strengthening our communities; and building inclusive products and technology. We have made solid progress towards our ongoing company commitments that map to these global guiding principles. To track progress and plan for the future, we use internally-developed products to bring diversity-and inclusion-related data into one centralized location and set our B&D strategy. Through these products, we can assess, measure, benchmark, and manage diversity and inclusion as well as empower our leaders to create B&D plans and measure performance and outcomes across areas such as hiring, development, and employee experience.

*

Our goals are aspirational and may change. Statements regarding our goals are not guarantees or promises that they will be met. Content available at websites and in documents referenced in this section are not incorporated herein and are not part of this Proxy Statement.

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Looking at our diversity data, we continue to make strides in our representation. As of January 31, 2022, women represented 41.2% of our global employees, and underrepresented minorities (defined as those who identify as Alaskan native, American Indian, Black, Latinx, Native Hawaiian, Other Pacific Islander, and/or two or more races) represented 13.7% of our U.S. employees. We have committed to increasing the overall representation of our Black and Latinx employees in the U.S. by 30% by 2023, and to double the number of Black and Latinx leaders in the U.S. by 2023. We have achieved and exceeded our target on overall representation (103%) and are 70% of the way to our target on leaders.

Our employees tell us they are most engaged when they are continuously being exposed to new things, empowered to build new skills, and able to make an impact. We offer a number of educational resources, development opportunities, and a support community to guide employees throughout their Workday careers, which we refer to as journeys. These begin right from the moment employees start at Workday, with Learning at Workday, journeys designed to help new employees onboard and get acquainted with our culture, business, and technology. These are complimented by Career Building at Workday, journeys designed to deepen expertise, grow capabilities, and make meaningful connections; Leading at Workday, journeys that help employees understand our leadership identity and prepare them to take on increasing leadership responsibilities; and The VIBE Way at Workday, journeys designed to equip and empower all employees with the tools and resources to incorporate VIBE into everything we do — from the language we use every day, to how we approach our work and each other, to the way we recruit and hire diverse talent at Workday.

Our culture and how we treat people are paramount at Workday, and we believe that being transparent and facilitating information sharing are key to our success. Workday leverages multiple communication channels to engage and inform employees, including company meetings, town halls, internal websites, and social collaboration tools. We also use Workday Peakon Employee Voice to collect feedback in real time from our employees and turn that feedback into dialog and action. We receive data points from these surveys that help us identify actions to take to improve our company and our culture.

Buoyed by the opportunities offered by our own technology, our talent strategy philosophy puts employees at the center of their own career and performance journey. A fundamental tenet of this approach is the belief that we should provide employees with the tools and framework to enable their careers, putting them in the driver’s seat. Our talent philosophy is centered on five factors that fuel employee success: enable contribution, grow capabilities, empower career, deepen connections, and align compensation and recognition.

Our talent and performance dashboard includes a summary of an employee’s five factors and provides a snapshot view of performance-related tasks, with a visual summary of goals, feedback, and growth opportunities. Employees can take action to update their contributions, capabilities, career, and connections using the quick links provided in the dashboard.

At Workday, we take a holistic approach to our employees’ wellbeing and have created wellbeing programs that focus on four core pillars: happiness, health, movement, and nutrition. These programs go beyond traditional medical benefits and wellness offerings and allow employees to focus on their chosen wellness goals as well as their mental health.

ESG and the World Around Us

Workday is committed to caring for people and the planet, and we focus on sustainability efforts that support our commitments to our stakeholders and align with our core values. We believe that doing good is good for business, and we concentrate our corporate social responsibility efforts on ways to positively impact the communities where we live and work in alignment with our commitments to all of our stakeholders. In light of today's global challenges, innovation plays a key role in doing our part to help solve some of the world's toughest problems. Every year, we set ambitious goals rooted in our core values to help address some of the world's most complex societal and environmental challenges.

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Workday provides our more than 9,500 customers with a carbon-neutral cloud. We match 100% of the electricity we use at our offices and data centers globally with clean, renewable sources. In fiscal 2021, we achieved net-zero carbon emissions across our offices, data centers, and business travel. We achieved this milestone through a combination of operational efficiency, procurement of renewable electricity equal to 100% of our consumption, and investing in high-quality carbon offset projects. As of the end of fiscal 2022, we mitigated our carbon legacy through the purchase of high-quality, third-party-verified emission reductions, or carbon offsets, effectively reducing Workday’s lifetime net carbon footprint to zero. In 2020, we committed to science-based emissions reduction targets — across the entire value chain — that are consistent with keeping global warming to 1.5°C above pre-industrial levels. In early 2022, our ambitious science-based targets were approved by the Science Based Targets initiative. With this commitment, we are taking our next steps toward minimizing our impact on the planet and helping our world transition to a net-zero future by 2050. We are committed to:

•

continue annually sourcing 100% renewable electricity through fiscal 2030;

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•

reducing absolute scope 3 business travel GHG emissions by 25% by fiscal 2026 from a fiscal 2020 base year; and

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70% of our suppliers by spend covering purchased goods & services and capital goods having science-based targets by fiscal 2026.

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We also work to actively shape broader ESG policy by engaging with industry leaders, policymakers, regulators, and industry partners. We advocate for government policies that aid the transition to a low-carbon economy, an equitable just transition for workers in carbon-intensive industries, and support the objectives of the Paris Agreement and the United Nations Sustainable Development Goals.

We believe in doing good for the greater good. In a time where our global community continues to battle ongoing health, economic, and social crises, our pledge to create opportunity for all helps to guide our strategic approach to making a positive social impact in the communities where we live and work.

We believe that talent is everywhere, but opportunity is not. In support of our efforts to give back to the communities where we live and work, our employees donate time and expertise as mentors and volunteers to help close the skills gap and connect job seekers to work. We also invest in leading non-profit workforce development organizations and provide direct training and employment opportunities for candidates facing barriers to employment through our Opportunity Onramps programs. On top of our strategic, company-led social impact and employee volunteerism efforts, we also believe that giving back is even more rewarding when people get to make an impact through their favorite causes. We encourage and support employee giving and volunteering through programs such as our charitable donation matching gift program, our paid time off benefit for employees to volunteer and give back to their communities, and our team volunteer experience, where employee teams of five or more can volunteer with a charity partner of their choice and receive a $5,000 grant.

Additional information about our Environmental and Social strategies and programs can be found in our Global Impact Report at https://globalimpact.workday.com.

ESG and our Customers

In line with our core values of customer service and innovation, we have increased our focus on how our technology can enable our customers to advance their own ESG goals, and how we can help them comply with the myriad of new and emerging ESG compliance and disclosure obligations. Workday is well positioned to play an important supporting role for our customers who are focused on ESG compliance because we are for our customers a central source of data - a centralized location whereby internal and external data can be brought together and analyzed. With our intelligent data core, customers are able to gather information with ease and report with confidence. For example, with Workday as the single source of worker data, customers can measure belonging and diversity outcomes across the employee lifecycle. Customers can also use Workday to source, evaluate, and manage sustainable suppliers; deliver compliance training; and, with our planning solutions, proactively plan and track ESG goals.

When it comes to innovation, we build with trust top of mind. Our customers expect us to create and deliver products with integrity, and because of that, privacy, ethics, and security have been embedded into Workday's design since day

2022 Proxy Statement | 41

ESG at Workday

one. We are focused on delivering unparalleled security and data privacy across all aspects of the Workday service. This includes complying — and helping our customers comply — with various international privacy regulations and staying true to our privacy-by-design principles. By providing a consistent security model, employing industry-leading safeguards, and continuously monitoring our service, we prioritize the safeguarding of our customers' data. In addition to our commitment to privacy in the products we deliver, we believe privacy is a fundamental right. We are a leader in the enterprise cloud sector and work constructively with policymakers to advance a modern legal framework that protects individuals and enhances understanding and trust in technology around the world.

42 | workday.com

   

RELATED PARTY TRANSACTIONS

In addition to the executive officer and director compensation arrangements discussed under “Executive Compensation,” we describe below transactions for fiscal 2022 in which Workday has been a participant, in which the amount involved in the transaction exceeds $120,000, and in which any of our directors, executive officers, or holders of more than 5% of our Class A common stock, or any immediate family member of, or person sharing the same household with, any of these individuals, had or will have a direct or indirect material interest.

Stock Voting Agreement

Messrs. Duffield and Bhusri, our co-founders, have entered into a stock voting agreement with each other and Workday. This agreement applies to all Class B common stock owned from time to time by our co-founders and each of their permitted transferees, which represents approximately 72% of the outstanding voting power of our capital stock as of April 20, 2022.

Employee Members of our Board of Directors

During fiscal 2022, Thomas Bogan, who joined our Board of Directors in February 2022, was employed by Workday and was paid aggregate compensation of $408,700, including base salary and other cash compensation for his services as an employee of Workday in the role of Vice Chairman of the company.

During fiscal 2022, in addition to his role as a member of our Board of Directors through March 2021, Mr. Stankey was employed by Workday as Vice Chairman and was paid aggregate compensation of $65,000, comprised of base salary.

Real Estate Leases

In fiscal 2022, we leased certain office space in Pleasanton, California under various lease agreements with NPC Holdings, LLC (“NPC”), an affiliate of Mr. Duffield, as set forth in the table below: